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Standards are Necessity, Not Option

As big companies and financial institutions rush to set up online billing systems, some are finding that their EBPP platforms could be hobbled by the same lack of industrywide standards that has slowed intercompany integration of other e-business software

As big companies and financial institutions rush to set up online billing systems, some are finding that their EBPP platforms could be hobbled by the same lack of industrywide standards that has slowed intercompany integration of other e-business software.

The problem is that many of the existing electronic bill presentment and payment solutions are built around one specification for sharing data, while newer systems adhere to a different, and some say more robust, specification that may be incompatible.

OFX (Open Financial Exchange) is the financial transaction standard originated by CheckFree Corp., Microsoft Corp. and Intuit Inc. and used currently by the financial industry to conduct electronic transactions.

IFX (Interactive Financial Exchange) is emerging as the newest Extensible Markup Language-based incarnation for EBPP and is being championed by the IFX Forum, which is led by major EBPP software makers.

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"What this means for businesses is that they have to prepare for both," said James Van Dyke, an analyst at Jupiter Communications Inc., in San Francisco. "If [a vendor] is late with IFX, it will not help the customer."

There are major players on both sides of the standards issue. MasterCard International Inc., utilizing Avolent Inc.s EBPP software, has based its widely used Remote Payment and Presentment hub on the OFX standard. On the flip side, Spectrum EBP LLC, a joint venture of Chase Manhattan Corp., First Union Corp. and Wells Fargo & Co., is actively pushing the IFX standard.

At the same time, CheckFree Corp., which is emerging as a leading EBPP software vendor, operates on its own standard, CheckFree Services API, which is modeled after Microsofts message queuing.

The IFX Forum, to which all of the above belong, is trying to straighten out the differences.

According to the Forums chairman, Mark Tiggas, who is also the enterprise e-commerce architect with Wells Fargo, there have been talks among MasterCard, Spectrum and CheckFree on ways to merge standards. "We will grandfather in OFX, because we have to," said Tiggas, in Minneapolis. "But we will support IFX."

Its not clear that there is a benefit from one standard over the other, Tiggas said, "other than IFX is more expressive—with mechanisms for richer payment information and more complete information that should reduce the number of manual processes on the billers side."

Other issues standards need to address are workflow and dispute resolution. What also has to be decided is which standard best deals with content definition. "Being able to connect and trade data over the Internet is becoming standard fare," said Tim Henderson, chief technology officer at e-procurement software company NetCommerce Corp., in Altamonte Springs, Fla. "But being able to do that with standards that many agree to, thats where the slowdown is."

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